Reuters reported that steel output in Italy is set to fall at a double digit pace again in 2010 as industrial demand fails to take off.
Mr Giuseppe Pasini chairman of Federacciai confirmed his earlier forecast of a 45% fall in steel output this year after production fell 43% in the first 8 months of 2009. He said that "We do not see signs of recovery at the moment. Demand has fallen sharply and will be very, very weak in 2010. We do not have reasons to believe that the situation will change soon. Maybe there will be a slight recovery, but not before 2011."
Mr Pasini said that he could only hope that a double digit output fall expected next year would be smaller than in 2009, but declined to give a more precise estimate. Italy produced 30.5 million tonnes of steel in 2008.
He said that Italy's steel sector fared worse than its German rivals and the European Union's industry in general in 2009 because government backed big infrastructure projects, the main demand driver for the sector, have failed to get off the ground. He added that "There are funds for these projects, but bureaucratic procedures in Italy are so long that works have not started yet."
Mr Pasini said that "We do not have forecasts that could make us expect an improvement of the situation. I think this situation could last for the entire 2010 for all of Europe." He added that Italy's steel makers had to cut capacity by about 40%, responding to sluggish demand, and many would have to start cutting jobs. The Italian sector has so far used a temporary layoffs mechanism.
Finally, Mr Pasini said that Italian steel makers would appeal against the European Commission's decision to reinstate fines of over EUR 83 million on eight Italian companies which it said had colluded to force up prices of steel bars for reinforcing concrete. He added that "We will definitely appeal it."
(Sourced from www.reuters.com)
